Football clubs in liquidation: it’s a joke (but no laughing matter)!

Posted onApril 20, 2011byDavey

Rangers chairman Alastair Johnston has recently admitted that the Scottish giants could realistically go bust; this poorly timed admission comes in close proximity to talks being held with would-be owner Craig Whyte and recent figures suggesting the club has amounted debts of twenty-nine million.

Whilst being interviewed Johnston was adamant that when the figures are next published the debt will have dropped to around twenty-two million. However when pressed about the possibility of the club going out of business if decisions to be made over tax payments go against them he stated the following,

“The reality is that, if the decision is bad and the club can’t pay, there would be a decision to be made”.

Rangers as a club have since released a statement denying any comments that were made indicating that the club could go out of business; the fact does remain however that Rangers are in financial difficulties and their future is by no means secure.

I often find myself complaining about football clubs and indeed the FA being run by businessmen with no nous for football matters, men who make rules when they’ve never been in a position to break them; but with the list of clubs going into financial problems mounting I have to question the ability of these people not only in football matters but also business matters.

In January 2006 Milan Mandaric sold Portsmouth FC to ‘businessman’ Alexandre Gaydamak and all looked good for the south coast club. Gaydamak ploughed a fortune into the club during the January sales and effectively purchased a new squad; the result was a top half Premiership finish. With Gaydamak in the owners chair and Harry Redknapp in the dugout all was looking bright and prosperous for Portsmouth culminating in an FA cup triumph in the 2007/2008 season which subsequently earned them a Europa League (then UEFA Cup) place for the following season.

The dream ended all too soon though; by May 2009 the club had been run into near financial ruin and Gaydamak sold the club to ‘businessman’ Sulaiman Al Fahim. Despite the impending sale of the club and promise of re-investment Portsmouth were forced to sell a large chunk of their squad, and unfortunately as is always the case this meant not only their highest paid players but also their best players left the club; Jermaine Defoe, Peter Crouch, Sylvain Distin, Glen Johnson and Niko Kranjcar all exited.

Al Fahim sold the club just forty days after the purchase and in December 2009 it was announced that the Portsmouth board had failed to pay the players for the second consecutive month. HM Revenue and Customs filed a winding-up petition against Portsmouth at the High Court in London on the 23rd December 2009. The club fought the winding up order and eventually avoided this fate following a visit to the high courts; however administration was a fate the club couldn’t avoid.

Former owner and ‘businessman’ Gaydamak attributes as ‘businessman’ had already come into question prior to this with reports circulating about him demanding a “ransom” payment of two and a half million from the club. In doing this Gaydamak put the club that he had once owned in serious jeopardy of going into liquidation.

Although avoiding liquidation Portsmouth were eventually relegated from the Premiership joining their South Coast rivals Southampton and former giants Leeds in the football league; two clubs who had also been relegated due to being financially run into the ground.

Gaydamak may seem like the worst offender for running a club into the ground, for the way he held the club to ransom if nothing else but there’s someone else who gives him a good run for his money …

‘Businessman’ Peter Ridsdale seems intent on working for and destroying as many football clubs as is humanly possible and the FA, UEFA or FIFA seem intent on doing nothing to stop people like him continually working in football.

Let’s take a little look at Ridsdale’s football CV shall we…

He became chairman of his hometown club, Leeds United in 1997 and similarly to Gaydamak at Portsmouth he initially enjoyed success both at home and in Europe; because of this he also had a good early relationship with the clubs fans. The relationship soon vanished when the full extent of what he and his board had done to the club came into the cold light of day. Under Ridsdale’s stewardship the club borrowed sixty million pounds against future gate receipts, effectively gambling on Leeds qualifying for the Champions League in successive seasons; which they failed to do. He is now best remembered by Leeds supporters for the financial and relegation nightmares that the club found themselves in; they went from a top flight Premier League/Champions League club to a League One club in the space of three seasons.

Ridsdale then became owner of Barnsley and hailed himself for rescuing them from the fallout of the revenue loss from the ITV digital collapse. He will not be remembered by Barnsley fans for this however; what he will be remembered for is nearly taking them into liquidation before Gordon Shepherd and Patrick Cryne took over at the club.

Next up he became chairman of Cardiff City. Here he once again flirted with disaster; trying to build a squad suitable for a promotion push while the club were fighting off winding-up orders. Ridsdale was subsequently forced to apologise for misleading fans when he admitted money raised during 2009 from season ticket renewals for 2011 had to be spent on settling debts rather than reinforcements. When he eventually left Cardiff the clubs estimated debt was between ten and thirty million pounds and they were also facing a fifth winding up order over a one-point-nine million pound tax bill. The publishing of the financial accounts for year 2009 in August 2010 revealed that the clubs actual debt was sixty-six million. This has led to continual concerns over the existence of the club.

Ridsdale is now acting chairman at Plymouth Argyle who are themselves in administration and fighting for survival as a football club whilst seeking new owners.

HOW IS THIS MAN STILL WORKING IN FOOTBALL?

If it was any other business than football and someone produced a CV like that they wouldn’t even get an interview; their job application would promptly be fed into the shredder. Somehow though this man and people like him keep getting jobs at football clubs and keep taking them into administration, or worse.

People may say that this will never happen to clubs like Rangers and talk of them going out of business is just ‘paper talk’ but Leeds United proved that if the owners/chairmen aren’t dealing with the finances of any club, big or small, in the correct manner, then anything is possible. In fact the big clubs and big spenders of this world are going to be made more vulnerable when UEFA’s ‘financial fair play’ rule come into existence next year.

Good article and a lot of good points raised. It is a difficult balancing act getting someone who is Business savy, but understands what football is about. For as long as I can remember this has always been one of the problems between boardroom and manager.

With what has gone on before, I think there is always trouble around the corner. Football no doubt is now big business, maybe all these Americans coming in like Henry and Kronke and running a tight ship could be the way forward.

Worried is not the word .Ridsdale has brought my club Plymouth Argyle to it’s knees,wormed his way in took us to administration brought in his admin mate Brendan Guilfoyle to sort the sale of the club. Peter Ridsdale has stage managed the whole shocking lot . Leaving us in administration for 8 months while Guilfoyle’s firm P&A rake in £700,000 in fees ,and Ridsdale earning £25,000 a month has an adviser for P&A Parterners. KEEP CORRUPTION OUT OF FOOTBALL